All Articles Tagged "business capital"
Crowd-Funding on the Cusp of Change
(Wall Street Journal) — With regulators considering easing fund-raising rules for start-ups, social-networking sites that link entrepreneurs to large pools of donors are gearing up for a boom. The sites—which facilitate “crowd-funding”—have taken off in the past few years. Small businesses pitch ideas to people in a site’s online network, who decide whether to donate. The sites typically make money by charging the small business a fee. Until now, U.S. regulations permitted these sites only to facilitate donations—not purchases of equity stakes. The Securities and Exchange Commission now is reviewing those rules, and many crowd-funding sites are pushing to axe the stake ban. The sites hope that the incentive of an equity stake will draw more donors, prompting a surge in business for the companies that run the sites.
Small Business Investment Companies Explained
(Businessweek) — Small business investment companies provided $1.59 billion to small businesses in 2010, the highest single-year volume in the program’s 52-year history, according to the U.S. Small Business Administration. SBICs are for-profit venture capital firms, privately owned and managed but licensed and regulated by the SBA. The SBIC program was started in 1958 to make capital investments in U.S.-based small businesses. Companies with tangible net worth of $18 million or less and average net profits of less than $6 million over the previous two years are eligible for SBIC investment. Funding from SBICs boomed in fiscal year 2010, increasing 23 percent over the previous four years.
When Severance is Your Seed Money
(Reuters) — No. 1: Don’t leap before you look.: More than anything else, severance provides money to live on while you answer basic questions for your business plan: What will it cost start? What will revenues be? Who is your customer and how will you reach him? When will you pay yourself a salary? “You need to figure out if there is a business opportunity here or just an idea,” says Jonathan York, director of the Center for Innovation and Entrepreneurship at California Polytechnic University in San Luis Obispo, Calif.
Get the Capital You Need
(Businessweek) — 1. Choose an SBA-approved lender. SBA loans are typically easier to get and more flexible than conventional bank loans. They usually offer lower down payment requirements, longer loan terms, and lower monthly payments. If an SBA loan is the best option, choose an SBA-approved lender. The application and approval process is SBA-specific and having a lender with deep experience can save borrowers time, money, and aggravation. It’s also helpful if your lender has strong networks with other professionals such as attorneys, accountants, and builders. Having these networks in place can further streamline the process.
